Construction is expected to begin next spring on a $25 million, six-story hotel in the Eddy Street Commons development.
Work on the full service hotel means a key piece of the project is finally falling into place.
“We have a very specific concept in mind; we’re pretty far along on the planning stages,” said Matt Gabet with Kite Realty Group. “It is probably the best location on the overall phase one.”
Since day one, developers have planned to capitalize on the location by building a nine story hotel with luxury condos on the top floors.
The building would be in alignment with, and overlook the football stadium and Touchdown Jesus, offering a spectacular view.
Yet the hotel plans have mysteriously lingered on the drawing board while other parts of the project were carried out: Today brought an explanation why.
“The (hotel) plans have changed. It was originally planned to be a 255-room hotel, with 60-luxury condos, that is, given the economic conditions over the past three to four years, we've modified the scale and the scope to something that we feel is more feasible,” said Gabet.
The new plans call for a six story building with 160 hotel rooms—but no condos, and no further delay.
“If things get completed there will be enough money to make the bond payments,” said David Relos with South Bend’s Department of Community Investment.
The City of South Bend built a $35 million parking garage in support of Eddy Street Commons, and intended to pay for it with increased tax proceeds raised by the additional private development.
The more promised development that actually takes place, the more comfortable the city will feel financially.
“Once the second hotel gets built and the other residential components get built,” said Relos. “Those two things alone should be enough to make the bond payments.”
If the actual development fails to provide enough new tax dollars to cover the bill—the city has protection.
It can impose a delay fee on the developer of up to $1 million to cover any shortage.
“We think if we’re able to, we’re able to work together to get the hotel done on time and on schedule it (the delay fee) should not come into play,” said Matt Gabet, who also called the fee a great incentive to move forward.
The housing portion of Eddy Street Commons represents an area where the developers are poised to deliver more than they promised.
“We're looking to roll out 15 courtyard town homes, just south of Napoleon, and later in the fall, an additional 50 to 60 flats,” said Gabet.
The additional flats were not in the original development plan.
City officials note that the Eddy Street Commons project has brought in $17.6 million in additional taxes since 2010 (sales, state and county income, innkeepers, and property), and has had a direct economic impact of $36.2 million.